Investor to nation’s largest bookstore chain: ‘Sell yourself!’

One investor wants Barnes & Noble to embark on a new chapter — with a new owner.



Activist investor Sandell Asset Management issued a letter to Barnes & Noble’s board of directors on Tuesday, urging the company to sell itself. The firm believes a sale would not only improve the value of the brand, but protect itself against a volatile marketplace that continues to take a toll on sales.



“Company’s stakeholders would be better served if Barnes & Noble were operated as a private company or as a division within a larger company, which would allow management to focus 100% of its attention on the company’s underlying operations,” the letter said. “To wit, it is our belief that Barnes & Noble should be owned by an organization with both the vision and stability of capital that investors in the public market generally cannot provide.”



Sandell recently started buying a stake in Barnes & Noble. It is now among the retailer's 10 biggest investors, according to Fortune.



In the report, Barnes & Noble spokesperson Mary Ellen Keating said in an email statement that Sandell had not reached out to the bookseller. She added, “we welcome constructive dialogue with all of our shareholders.”



The letter’s release did impact the retailer’s stock — for the better — on Tuesday morning. Shares of Barnes & Noble saw a 14% increase during morning trading, according to Fortune.



The nation’s largest bookstore continues to reduce costs, and these efforts helped the chain narrow its loss in its fourth quarter, ended April 29. However, sales continue to slide.



Barnes & Noble posted a net loss of $13.4 million, or $0.19 per share, for the quarter, compared to a loss of $30.6 million, or $0.42 per share, in the prior year. Total sales fell 6.3% to $821 million for the quarter. Same-store sales declined 6.3%. Online sales increased 2.9%.



"While fiscal 2017 proved to be a challenging year for the company, we reduced costs by $137 million, enabling us to sustain our profitability level," said Demos Parneros, CEO, Barnes & Noble, Inc. "In fiscal 2018, we are focusing on ways to improve the business and reignite sales through an aggressive test and learn process and companywide simplification process that will take out costs.”